Wall Street reform at the top of the agenda

WALL STREET REFORM AT THE TOP OF THE AGENDA…. As congressional lawmakers return to Capitol Hill after two weeks off, members have plenty of unfinished business on their to-do list, and a closing window of opportunity to act on its agenda before the midterm elections.

And while there will no doubt be plenty of attention focused on the upcoming Supreme Court confirmation fight, some contingents of the Democratic majority nevertheless have their eyes on the new, top legislative priority.

Liberal Democrats see an opportunity to reassert their power in the Senate this spring on the Wall Street reform bill, after being forced to swallow a series of compromises on everything from health care reform to jobs legislation.

A group of Democrats, joined by Senate Majority Whip Dick Durbin of Illinois, are planning an aggressive spring offensive to strengthen key provisions of the financial reform bill — and daring Senate Republicans to vote against them.

“Given that [large financial firms] steered this country into the ditch, it’s going to be very hard to stand up on the floor and say don’t do financial reform or do it without teeth,” said Sen. Byron Dorgan (D-N.D.). “There are a number of people in our caucus who feel like there are things that can be done to strengthen it.”

Liberal Democrats believe widespread frustration across the country with Wall Street bailouts will make it difficult for Senate Republicans to mount a full-scale opposition to the legislation, particularly as voters near the midterm elections this fall.

I like the Dems’ optimism, and it’s encouraging to see them weigh the benefits of going on the offensive. On the merits, the strategy makes sense, not only because adding new accountability and safeguards to the financial system would help provide economic stability for years to come, but also because Americans aren’t exactly fond of the bailed-out industry that brought the global system to the brink of collapse.

But be on the lookout for two broad angles. The first is the less-ambitious Democratic senators who are more inclined to weaken the bill to get more Republican support. The momentum seems to be moving in the other direction, but the moderates may yet stand in the way of a bold effort.

The second is reflexive, knee-jerk opposition from all Republicans at all times. Whenever anyone thinks, “Republicans wouldn’t dare do [fill in the blank],” the GOP invariably does just that. In this case, it seems implausible that Republicans, en masse, would fight against reforming a system that nearly destroyed the global economy, but I’d remind Senate Dems that when related legislation came up in the House, it generated exactly zero GOP votes.

The Politico piece added, “Unions, consumer groups, party activists and liberals on Capitol Hill see regulatory reform as a win-win issue: They get either a strong bill or a strong campaign argument for the midterm elections.” That sounds about right, but Dems would be wise to prepare for inexplicable Republican resistence.